Correlation Between Obducat AB and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Obducat AB and Dow Jones at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Obducat AB and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Obducat AB and Dow Jones Industrial, you can compare the effects of market volatilities on Obducat AB and Dow Jones and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Obducat AB with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Obducat AB and Dow Jones.
Diversification Opportunities for Obducat AB and Dow Jones
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Obducat and Dow is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Obducat AB and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Obducat AB is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Obducat AB are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Obducat AB i.e., Obducat AB and Dow Jones go up and down completely randomly.
Pair Corralation between Obducat AB and Dow Jones
Assuming the 90 days horizon Obducat AB is expected to generate 36.19 times more return on investment than Dow Jones. However, Obducat AB is 36.19 times more volatile than Dow Jones Industrial. It trades about 0.11 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 9.50 in Obducat AB on August 27, 2024 and sell it today you would lose (3.00) from holding Obducat AB or give up 31.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.22% |
| Values | Daily Returns |
Obducat AB vs. Dow Jones Industrial
Performance |
| Timeline |
Obducat AB and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Obducat AB
Pair trading matchups for Obducat AB
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Obducat AB and Dow Jones
The main advantage of trading using opposite Obducat AB and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Obducat AB position performs unexpectedly, Dow Jones can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dow Jones will offset losses from the drop in Dow Jones' long position.| Obducat AB vs. Virtus Investment Partners | Obducat AB vs. Postal Savings Bank | Obducat AB vs. United Rentals | Obducat AB vs. Retail Estates NV |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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